Wednesday, October 6, 2010

Not convinced, but thank you Mises

This week's readings seemed to be an attack on empirical methods in economics. I have found that in my own field of political science there are many scholars who will attack the empirical method as well, but this is often due to their dissatisfaction with a specific school of thought. Makes sense, doesn't it? Someone identifies a trend or a problem with clear and accurate information. How do you attack such findings? All you simply have to do is discredit their methods entirely. Austrian economics is well known for its philosophical and theoretical perspectives. Aside from the fact that I disagree with their findings and views altogether, this method simply is not satisfying. I saw, for instance, that he brought the minimum wage issue. Now, if I were to go by the Austrian perspective, it would make great sense to me that more money would mean a rise in unemployment. However, if I were to go by an empirical analysis, like I have before when I have investigated this issue, I would quickly realize that this is simply not true and that there is no evidence of such occurring. Why? Well, there are a number of different factors to consider, such as the amount of company funds that actually go into the paychecks in the first place. An empirical study would investigate this and disprove the Austrian viewpoint entirely.